Oil Turmoil Sends Shockwaves Through Global Markets

Global markets reeled on Thursday as oil prices surged following reports of explosive attacks in the Strait of Hormuz and Iraqi waters, raising inflation fears and borrowing costs worldwide. U.S. crude climbed 7.5% to $93.80 per barrel, building on an overnight increase of over 4%, while Brent crude jumped 7.7% to $99.03.

The International Energy Agency plans to release 400 million barrels of oil from reserves, but escalating tensions with Iran have cast a shadow over these efforts. Iranian attacks on oil tankers in the Persian Gulf are seen as retaliatory, complicating efforts to stabilize runaway prices. The incidents intensified market volatility, negatively affecting Asian shares and major indices globally.

Bond yields rose globally due to inflation risks, overshadowing safe-haven plays. Euro slipped against the dollar as ECB rate hike speculations rose. Amid geopolitical turmoil, currency markets reacted with a flight to liquidity, impacting energy-importing countries like Japan and Europe.